Two newly formed consortiums are set to compete in an auction on April 25 in New York for the assets of the now-defunct cryptocurrency lender, Celsius Network. According to media and court documents, Gemini and Coinbase, two cryptocurrency exchanges, are among the firms taking part in the bidding.
According to court records, one of the consortiums is Fahrenheit, which has the financial support of Michael Arrington’s blockchain investor company Arrington Capital. Steven Kokinos, the former CEO of Algorand, Proof Group Capital Management, and investment banker Ravi Kaza are additional consortium members.
In a since-deleted tweet from Arrington on April 22, Fortune reported that Arrington had listed Coinbase as one of the firms supporting the Fahrenheit consortium. Coinbase declined to respond to the publication’s request for comment.
The Blockchain Recovery Investment Committee, supported by prominent entities such as Gemini crypto exchange, VanEck fund manager, Global X Digital Bitcoin mining firm, and Plutus Lending, is among the contenders bidding for Celsius assets.
The assets are being challenged by both consortiums against NovaWulf Digital Management, the “stalking horse bidder”—a phrase for the initial purchaser of a bankrupt company who sets the standard for subsequent bidders.
In addition to a direct cash commitment in the amount of $45 million to $55 million, NovaWulf’s proposal calls for the development of a new public platform that Celsius creditors will entirely own. Under NovaWulf’s proposal, customers might get up to 70% of their funds back.
Arrington’s tweets suggest that the Fahrenheit consortium aims to establish a new company that focuses on increasing the value of the Celsius assets to benefit all stakeholders. A team of experienced crypto professionals will manage the company and will possess significant assets, such as bitcoin mining operations, institutional and retail loans, a diverse range of crypto assets, and a venture capital portfolio.
The auction is an essential phase for Celsius’ clients to get the funds back. In July 2022, following the suspension of withdrawals, the company declared Chapter 11 bankruptcy, citing “exceptional market conditions” and refuting allegations of bankruptcy.